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Unusual connections touched off Pigeon probe

Steven M. Casey and Christopher M. Grant come from different political backgrounds – Casey is a Democrat and Grant is a Republican – and as the adage goes, politics makes for strange bedfellows.

The pair have been top aides to two of the most important officeholders in the Buffalo area – Mayor Byron W. Brown and Rep. Chris Collins.

At some point, Casey and Grant became friends, and then worked together on political campaigns through two political consulting firms each had formed.

These political and business entanglements between two unlikely partners intrigued state and federal investigators, especially since Casey has strong ties to G. Steven Pigeon, a Democratic power broker on both the local and state level for two or more decades.

And last month, those investigators, armed with search warrants, went knocking on the doors of all three.

“They were working together on things, which is kind of strange – a Republican and two Democrats,” one official familiar with the state and federal investigation said after the searches of Casey’s, Grant’s and Pigeon’s homes in late May.

The fact that Casey and Grant worked together behind the scenes on political campaigns, connected with Pigeon on some campaigns and received payments without directly reporting their consulting work to the state have raised red flags for investigators and State Attorney General Eric Schneiderman.

This story of these connections was pieced together after reviewing State Supreme Court records, campaign filings with the state Board of Elections and interviews with six sources familiar with the investigation and the three men.

No charges have been lodged, and lawyers for all three insist that they know of nothing illegal done by Casey, Grant or Pigeon.

“The fact that they worked together, doing a mailer, is not illegal,” said Thomas J. Eoannou, an attorney for Grant.

But of particular interest to the investigators, according to sources familiar with the probe, is the money Pigeon’s independent political campaign committee – the WNY Progressive Caucus – reported spending on campaign literature, and more specifically, any fees Casey and Grant earned from the caucus that aren’t itemized on state election board finance reports.

Connections to caucus

Casey and Grant designed several pieces of campaign literature for Pigeon’s Progressive Caucus in 2013, sources said. That’s when Pigeon’s organization was supporting candidates challenging those backed by the headquarters of the Erie County Democratic Party.

The two were hired to create campaign fliers for four Erie County Legislature races. Casey came up with a concept. And Grant turned Casey’s idea into a graphic design that was sent to a printer, sources said.

Casey and Grant were paid for their work. But their fees – said to be in the tens of thousands of dollars – don’t appear on any campaign filings. That’s because the fees were included in the invoice sent to the printer, according to sources familiar with the case.

The WNY Progressive Caucus paid the printer for the design and printing costs, and then the printer paid Grant and Casey, the sources said. The total cost therefore showed up on campaign filings as an expense paid to the printer.

A similar billing process was used for work Grant and Casey also did together for Brown’s 2013 re-election campaign, according to a source who has knowledge of their relationship.

State election law requires that second-party payments be itemized if they are over $5,000. The News could not find evidence of any political campaign in New York State filing such reports.

Nonetheless, lawyers for Grant and Casey said nothing was illegal about this printing and consulting arrangement.

“It’s my understanding it’s commonplace that different charges associated with putting out fliers would be put in a single invoice,” said Casey’s attorney, Rodney O. Personius. “It’s just a practical way to get bills out and paid. There’s nothing untoward here.”

Personius said he and Casey were not told of any allegations being made against Casey.

“We are anxious to learn,” Personius said. “Once we know, Steve and I will be in a position to make statements. The top of his list is to clear this up.”

Pigeon’s attorney also has denied any wrongdoing.

And Grant’s attorney, Eoannou, acknowledged that Grant worked with Casey but did nothing wrong.

“They did a very limited amount of work together,” he said.

What’s more, he said Grant is hiding nothing.

“Mr. Grant has participated with authorities every step of the way since they first contacted him on Thursday May 28th and expects to continue to help in any way that he can,” Eoannou added. “We haven’t hesitated to answer any questions. We have no problem with them looking. It’s an open book.”

Still, the billing process used to pay Casey and Grant for work done for the WNY Progressive Caucus raised a red flag for investigators. Their probe includes following the money trail to learn where Pigeon’s political committee raised money, and where the money went.

And several elected officials contacted by The Buffalo News, who did not want to be identified because they didn’t want to be drawn into the controversy, said that while it was legal, the billing process WNY Progressive Caucus used seems unusual. Casey was placing the orders with the printer who paid him and Grant, which resulted in the printer being identified on campaign records but not them. That gives the impression that the two didn’t want their role with Pigeon’s organization publicly known, these sources said.

Personius discounted that perception.

“That sounds like speculation, which should not be the basis of anyone’s opinion,” Personius responded.

County probe

The two-step path for payments to Grant and Casey isn’t the only thing that raised red flags for investigators.

So did initial reactions from two firms that the WNY Progressive Caucus hired to print campaign literature, when Erie County investigators started asking questions.

Before Schneiderman began his probe of Pigeon’s political activities, the Erie County Board of Elections was investigating whether Pigeon’s WNY Progressive Caucus was coordinating its independent political activities with candidates the caucus was backing. State election law forbids such coordination.

County investigators also were looking into whether the WNY Progressive Caucus’ campaign finance statements were accurate and whether political contributions exceeded the maximum allowed by the state, according to court records.

The county investigation, like the state one that followed, focused on campaign literature the caucus created and distributed, court records show.

Of the $235,000 that Pigeon’s caucus spent in 2013, over half – at least $130,000 – went for campaign literature.

The county election board sent subpoenas to two printing companies used by the WNY Progressive Caucus. Both firms were told they were not the target of the investigations; WNY Progressive Caucus was the target. Gallagher Printing turned over invoices to the county Board of Elections for several hundred dollars worth of work, even though campaign filings showed the WNY Progressive Caucus paid Gallagher Printing $10,700 during August and September 2013, according to court and election board papers.

Election officials were struck by the gap.

Dennis Gallagher, the company treasurer, last week told The Buffalo News the discrepancy resulted from a misunderstanding over which records the election board was seeking.

“They weren’t clear on what they wanted,” he said.

The county Board of Elections sent its files to the state Board of Elections, recommending it look into Pigeon, and from there it went to the state Attorney General’s Office and the FBI.

State, federal probe

In February 2015, months after Gallagher met with county elections officials, state investigators and the FBI turned up at Gallagher Printing, looking for records of anything related to WNY Progressive Caucus orders, including canceled checks. Gallagher Printing turned over records representing thousands of dollars in orders, possibly $10,000 or more, Gallagher said.

David Pfaff placed all orders from the WNY Progressive Caucus that Gallagher Printing received, the company treasurer said. Pfaff, a longtime associate of Pigeon, sent campaign literature designs that needed to be printed, Gallagher said, and Gallagher Printing was only paid for printing. It did not pay the designer or anyone else with money received from the WNY Progressive Caucus, he said.

“Any money they paid me stayed here,” Gallagher said.

Pfaff received about $1,000 from the WNY Progressive Caucus in August as reimbursement for print and postage, according to campaign committee reports.

Another printer

The county election board also had subpoenaed Marketing Technologies of WNY, which the WNY Progressive Caucus paid a total of $102,000 in August and September 2013, according to campaign reports.

Marketing Tech printed fliers that Casey and Grant did for WNY Progressive, several sources said. It was Marketing Tech, therefore, that would have paid Grant and Casey with a portion of the $102,000 received from the WNY Progressive Caucus.

In response to the county subpoena, Marketing Tech owner Donald Papaj turned over paper invoices to the election board. But he told the board that emails between WNY Progressive Caucus and his company had been deleted, according to court papers.

“My person that manages those accounts deleted all her emails,” Papaj told the court in August 2014. “They were deleted, and I had an email issue. We lost everything on our server for a period of time, six months or something. ... It got totally wiped out.”

At that same court session, Papaj identified Casey as his company’s connection at the WNY Progressive Caucus. It was the first time the election board heard that Casey had a connection to the WNY Progressive Caucus literature.

At the court’s request, Papaj also authorized the court to compel his company’s Internet provider to access the deleted emails between Marketing Tech and the WNY Progressive Caucus, and to turn them over to the county Board of Elections.

Papaj declined to talk to The Buffalo News.

“It’s really not appropriate for me to talk about it,” he said when asked about Pigeon’s campaign committee.

Two firms

Among the records that state and federal investigators no doubt were seeking when they searched both Casey’s and Grant’s homes in late May were records related to their separate political consulting firms.

Casey formed LSA Solutions in June 2012 to establish a demarcation between his private consulting work and his job as deputy mayor of Buffalo, his attorney said. He left City Hall in July 2014 to take a job as CEO of a development company in West Seneca.

Assemblywoman Crystal Peoples-Stokes’ re-election campaign paid LSA $31,000 in August and September 2014 for mailings and professional services, according to election board records.

The Buffalo lawmaker said she retained Casey “because I’ve known him so long and he’s good with doing literature and connecting with a mailing house.”

Peoples-Stokes said she has not been contacted by any law enforcement agencies to discuss Casey or Pigeon.

Hers is the only campaign filing of a local candidate making payment to LSA in New York State.

But if Casey’s firm used the same billing model as WNY Progressive Caucus did – the two-step payment of money going from printer to consultant – then other campaign work would not appear on his campaign filings.

Peoples-Stokes said she used Casey’s firm for campaign literature and mailing work.

Grant formed a consulting firm, HERD Solutions, in January 2012, right after Collins lost his bid for re-election as county executive, leaving Grant unemployed. Grant, though, became a top aide for Collins when he was elected to Congress.

State and county campaign finance reports detail $850,000 paid to HERD from local, state and federal candidates and political parties since January 2012. Clients included the New York State Republican Committee, State Sen. Michael Ranzenhofer, and former State Sen. Mark Grisanti. All the clients appear to be Republicans, although in one case, a Democrat running on the GOP line.

And in a reverse of the payment process used by WNY Progressive Caucus, some of the payments to Grant’s company went for printing.

One of the companies HERD Solutions often hired to print literature that Grant designed, according to his attorney, was TBN, a subsidiary of The Buffalo News.

“Herd Solutions is proud of the work it has done with printing vendors all over the country, including paying nearly $300,000 to The Buffalo News internal direct mail house,” Eoannou said.

Michael Kearns, a South Buffalo Democrat, retained HERD Solutions in 2012, when he ran in a special election for his Assembly seat. Denied the Democratic Party line, Kearns, a registered Democrat, ran on the Republican line.

“I worked with the Republicans. Chris Grant does work for all Republicans,” Kearns said.

Kearns said neither Casey nor Pigeon was involved with his campaign.

News reporters Tom Precious, Matt Spina and Jerry Zremski contributed to this report. email: sschulman@buffnews.com